GM deals with COVID disrupting suppliers
Pandemic curbs output in Mexico, hurting production
DETROIT — General-Motors has its eye south of the border as the coronavirus pandemic spreads, restricting the output of parts from some of its suppliers in Mexico.
That, in turn, could further impact GM’s vehicle production at its U.S. factories.
GM has had to either cancel some overtime shifts or run partial shifts at its important Arlington Assembly factory in Texas where it makes hot-selling, highly profitable full-size SUVs, GM spokesman David Barnas said Tuesday. It’s had to cancel some Corvette production recently at Bowling Green Assembly in Kentucky, too, because of parts supply disruptions.
In Flint Assembly, where GM makes its in-demand heavy-duty pickups, there has been only one disruption to production. Flint gets the wiring used for the electrical systemin the pickups froma supplier in Mexico.
“We’ve been minorly affected. GM canceled one production shift this year,” Flint’s UAW Local 598 Shop Chairman Eric Welter said of the impact from Mexico’s restricted output as COVID-19 cases rise.
Still, Welter said he’s as worried about parts supply disruptions as he is about rising COVID-19 cases at the plant.
For its part, GM said it willmake up for any hiccups in production by offering overtime. In the meantime, GM has its Global Purchasing and Supply Chain Command Center working around the clock to ensure all of GM’s factories get the parts they need. But as Mexico’s COVID-19 cases keep rising, so does the risk to GM’s production.
GM established its Global Purchasing and Supply Chain Command Center in 2000, then expanded it in 2011 after the Japanese earthquake and tsunami hit. The goal was for it take on amore global role, Barnas said.
The global aspect is significant. Mexico has topped 1 million confirmed COVID-19 cases with at least 98,259 deaths as of Saturday, according to the Associated Press. Part of the problem is that since earlier this year, Mexico has administered only about 2.5 million coronavirus tests to its citizens. Only seriously ill people get tested there. AP reports that testing roughly 1.9 percent of the population since the pandemic began hasmade it difficult to do effective contact tracing to mitigate the spread of the virus.
That spread is hitting suppliers’ factories in Mexico. Partly for that reason, a teamof “a dozen or so” supply chain specialists at GM are working 24/7, Barnas said.
“They continue to work intensely to ensure that all parts continue to flow into all of our facilities,” Barnas said. “Is there a particular focus on Mexico now due to the COVID restrictions? Sure.”
At GM’s Arlington Assembly, the automaker had to run a partial shift late Monday and early Tuesday because of “a temporary supply issue,” Barnas said.
A partial shift means vehicles are still being built, but not all the workers are there and production is not at full volume. There are about 1,690 hourly workers per shift at the plant.
Barnas declined to say how many workers were there or how many vehicles were being made. He said there were “quite a few employees working. We are producing full-size SUVs.”
GM resumed normal operations at Arlington on its third shift Tuesday evening with all employees returning to work on regular production, Barnas said.
But the earlier partial shifts were not the first disruption at that plant. GM had to cancel its overtime shift at Arlington on Nov. 14 because of a parts supply problem that day.
During GM’s third-quarter earnings call Nov. 5, CEO Mary Barra told Wall Street: “Our truck and full-size SUV plants are safely operating on three shifts, building every vehicle possible. Our dealers are doing a great job of maximizing sales and share despite tight supply. They are using GM-developed software that helps them order the highest-demand, fastest-turning vehicle build configurations.”
At Flint, GM makes its full-size heavy-duty Chevrolet Silverado and GMC Sierra pickups. They are richly profitable products that are in big-demand and tight supply. So GM has made sure to protect that assembly line fromany parts supply disruptions.
Flint gets wiring harnesses and other parts from suppliers in Mexico, Welter said. A wiring harness is a set of wires and connectors that run throughout the pickup.
“But GM has put us as a priority and scrambles to make sure we have parts and it’s a babysitting job each week,” Welter said. “As Mexico continues to restrict their output, that might be problematic.”
Since restarting the plant in mid-May, Flint has had about 70 workers test positive for coronavirus, but no one has spread it inside the plant, Welter said. Last week, 25 workers tested positive for the virus, Welter said. In a plant of 5,500 workers, that is a small percentage overall but, “it is bad and tough to deal with,” Welter said.
Despite the rise in COVID-19 and the anxiety that accompanies it, Welter said, “Suppliers are a bigger concern — that we can get parts out of Mexico and continue to run.”